Top Frequently Asked Questions for Earned Income Tax Credit

Answer:

Yes, if you meet the requirements, you may claim:

1. The Earned Income Credit

Generally, a child must live with you in the United States for more than half of the tax year to be a qualifying child. You may treat a child who was born alive or died in 2018 as having lived with you for more than half of 2018 if your main home was the child’s main home (or would have been) for more than half of the time he or she was alive in 2018.

The earned income credit requires that you provide a valid social security number (SSN) for your qualifying child. If you meet all of the other requirements to claim this credit, and your child was born and died in 2018 and didn't have an SSN, instead of an SSN, you may enter "DIED" on line 2 of Schedule EIC (Form 1040), Earned Income Credit and attach a copy of the child's birth certificate or a hospital medical record showing a live birth. 

   2. Dependency and/or Child Tax Credit  

Generally, the child must live with you for more than half of the tax year to be a qualifying child. You may treat a child who was born alive or died in 2018 as having lived with you for more than half of 2018 if your main home was (or would have been) the child's main home for more than half of the time he or she was alive in 2018. Whether your child was born alive depends on state law.

If you meet all of the other requirements to claim the child as a dependent, you usually must provide a taxpayer identifying number (TIN) for the child. If your child was born and died in 2018 and didn't have an SSN or other TIN, instead of a TIN, you may enter "DIED" in column 2 of the Form 1040, U.S. Individual Income Tax Return and attach a copy of the child's birth certificate or a hospital record showing a live birth.

The child tax credit requires that you provide a valid SSN for your qualifying child. If you meet all of the other requirements to claim this credit and your child was born and died in 2018 and didn’t have an SSN, instead of an SSN, you may enter “DIED” on column 2 of the Form 1040, and attach a copy of the child’s birth certificate or a hospital record showing a live birth.

Answer:

No, the noncustodial parent may not claim a child as a qualifying child for the earned income credit based solely on the custodial parent's release of a claim to exemption for the child.

  • The custodial parent may still be able to claim the child as a qualifying child for the earned income credit if the residency test and all the other requirements are met.

Note: The custodial parent is generally the parent with whom the child lives for the greater number of nights during the year. The noncustodial parent is the other parent. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. For details and an exception for a parent who works at night, see Publication 501, Dependents, Standard Deduction and Filing Information.

Answer:

Generally, you don't have to be entitled to claim the child as a dependent to claim the earned income credit based on the child being your qualifying child, because the support test for qualifying child as a dependent does not apply for the earned income credit.  However, if your qualifying child was married at the end of your tax year, he or she can't be your qualifying child unless you meet one of the following conditions:

  • You're entitled to claim the child as a dependent, or
  • The reason you're not entitled to claim the child as a dependent is that you released a claim to a dependency exemption for the child under the special rule for divorced or separated parents or parents who live apart

Answer:

If they otherwise meet all of the requirements to claim the earned income tax credit (EITC), unmarried parents with a qualifying child may choose which parent will claim the credit.

  • If there are two qualifying children, each parent may claim the credit based on one child.
  • One parent may claim the credit based on both children.
  • If both parents claim the same qualifying child for the EITC, but don't file a joint return together, the IRS will apply tie-breaker rules and treat the child as the qualifying child of the parent with whom the child lives for the longer amount of time in the tax year. If the child lives with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who has the higher adjusted gross income (AGI) for the tax year.
  • If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who has the highest AGI for the tax year.
  • If a parent can claim the child as a qualifying child but neither parent claims the child, the child is treated as the qualifying child of the person who has the highest AGI, but only if that person's AGI is higher than the AGI of any of the child's parents who can claim the child as a qualifying child.

Subcategory:

Answer:

No, for purposes of calculating the earned income credit, child support isn't considered earned income.

Examples of items that aren't earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers' compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans' benefits, including VA rehabilitation payments. Don't include any of these items in your earned income.

Frequently Asked Question Subcategories for Earned Income Tax Credit